Total surplus

Name: Total surplus
Brand: Quizplus
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Question

Total surplus

Quizplus · Accepted Answer

Total surplus is the sum of consumer and producer surplus in a market. Under perfect competition, the market produces the socially optimal quantity, maximizing total surplus. Total surplus also represents the gains from trade to market participants, as both consumers and producers benefit from engaging in the market transaction. Additionally, total surplus treats consumer and producer surplus equally, as both are important components of overall welfare in the market.

Total Surplus